Tech mahindra
Tech mahindra

What keeps leaders up at night?

Posted by: Kiran Wadhwani On December 14, 2015 03:08 PM

The rules of the game have changed. Labor Arbitrage, the adoption of which was natural, logical and inevitable a decade back, is quickly losing its promise. This only indispensable profitable alternative has now turned dispensable owing to the coming together of two dominant pieces on the “strategic board” played by BPO providers and consumers. These two pieces are: wage inflation and digitization.

Wage inflation is hitting both BPO consumers as well as providers hard. When the very premise of labor arbitrage (cost-savings derived from inexpensive offshore labor) gets hit, it is natural for all entities in the value chain to feel the impact. Increasing attrition levels are also responsible for compounding the problem. Today, the situation has reached a point where even the most aggressive and efficient workforce management teams are struggling to meet their customer satisfaction, efficiency and cost optimization objectives through offshoring.

Digitization, on the other hand, has emerged as one of the most powerful value levers today. Upon adoption, it promises a superior customer experience and delight. This has helped spawn scores of disruptive products and solutions for all industries to adopt and up their digital quotient. The impact of digitization is so strong that every industry today is ready to jump on the “digitization bandwagon” excited at the prospect of the benefits it can accrue. However, excitement aside, to truly realize the benefits of digitization, companies needs to have a solid digitization strategy in place because it also demands unparalleled levels of fungibility, agility and predictability of business processes. Without a “clean” digital strategy and well-oiled execution machinery, companies are more than likely to fall flat on their face despite heavy dollar investments.

The other big question that leaders are unable to put their arms around is the “increasing distance” between business and IT in the face of rising cost and complexity. Business demands innovation, efficiency, productivity, agility and accuracy, whereas IT demands compliance, security, scalability and assurance. Business wants lean whereas IT wants durability. The Business expects IT to address business variability and predictability whereas IT expects hard-dollar investments from the business to address that challenge. Business demands greater fungibility whereas IT demands better products and solutions. And the list goes on! So, who is right? And what is right? Is it meeting in the middle or is it quickly building a cost-effective but resilient bridges between the two functions?

And at the center of all of this, lies “the consumer”. Today’s consumers are better connected and well informed thanks to the rapid internet and the social media proliferation. And to win their pledge of loyalty by enriching customer experience, companies are happily pouring their dollars on big data and analytics. But even after all of this attention and spending, why did gaps highlighted above the surface? How can leaders plug these gaps quickly? What are the different options available? Which is the right option and why should it be adopted? Should the approach be strategic, tactical or both? What are the costs involved? When can the results be seen? Etc… etc.…

A Hint

Let humans do what they are good at: Think, Create and Innovate

Let the machines do what they are good at: Execute processes in a much more industrialized fashion

Tags: Technology, Innovation, BSG
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